HDB Resale Prices Up 0.9% in Q1 2023, Smallest Growth in Last 10 Quarters, Private Home Prices Rise 3.2% in Q1 2023, and More

4 April to 10 April 2023

Prices of HDB resale flats rose at a slower pace in Q1 2023, rising by 0.9% compared to the 2.3% hike seen in the fourth quarter of 2022. Meanwhile, private home prices in Singapore grew at a faster pace in the first quarter of 2023, increasing by 3.2% compared to 0.4% in the previous quarter.


1. HDB resale prices were up 0.9% in Q1 2023, the smallest growth in the last 10 quarters

HDB resale flat

Prices of HDB resale flats rose at a slower pace in Q1 2023, rising by 0.9% compared to the 2.3% hike seen in Q4 2022, reported CNA citing HDB.

It is also the smallest increase over the last 10 quarters.

Analysts take the moderate growth as a sign of price resistance setting in.

Eugene Lim, Key Executive Officer at ERA, said more buyers are exercising restraint when asked to raise their bid after the sellers turned down their initial offer to buy the flat.

Lee Sze Teck, Senior Director for Research at Huttons Asia, said potential buyers may have also turned to the Build-to-Order (BTO) market given that over 10,000 BTO flats are expected to be launched over the coming months.

 “Some of these flats may have shorter waiting times and may attract some buyers away from the resale market. The higher interest rate in 2023 may also deter buyers from the resale market and see them applying for a BTO flat,” he said.

Looking ahead, analysts expect prices to continue to increase albeit at a slower pace of 5% to 8% compared to 2022’s 10.4% and 2021’s 12.7% increase.

According to Dr Tan Tee Khoon, Country Manager – Singapore, PropertyGuru, HDB resale flat demand should gradually stabilise in 2023, as more BTO projects are completed, construction delays continue to alleviate, and more BTO flats are offered at the quarterly HDB launches. 

“We should expect the momentum of the price appreciation to slow and the HDB resale market to stabilise, barring any economic shocks,” he added.


2. Private home prices rise 3.2% in Q1 2023

condo singapore

Private home prices in Singapore grew at a faster pace in Q1 2023, increasing by 3.2% compared to 0.4% in Q4 2022, reported CNA citing the Urban Redevelopment Authority (URA).

The hike comes even as sales dropped by around 8% quarter-on-quarter (QoQ) and by around 38% year-on-year (YoY) in Q1 2023.

“The 3.2% growth observed for overall property prices in Q1 2023 is indicative that prices are stabilising amid slower sales,” said Dr Tan Tee Khoon, Country Manager – Singapore, PropertyGuru.

“However, the prices for private properties are unlikely to drop in the near term. Despite the increasing gap in pricing expectations between sellers and buyers, sellers are still able to hold out and maintain high asking prices due to the tight labour and rental market,” he added. 

The Rest of Central Region (RCR) saw prices of non-landed private homes increase by 4% during the quarter, while prices in the Core Central Region (CCR) and Outside Central Region (OCR) grew by 1% and 1.9%, respectively.

“The slower sales indicate that declining affordability has taken a toll on some potential buyers who face the dual challenges of skyrocketing interest rates and continued price growth,” said Christine Sun, Senior Vice President of Research and Analytics at OrangeTee & Tie.

Huttons Asia’s Lee attributed the hike in private home prices to “more property launches” as well as the return of buyers following the year-end seasonal lull in 2022.

He noted that the marginal increase in property tax did not affect market demand “as buyers chased after attractively priced homes in the market”.

Related article: Singapore District Map: Defining the CCR, RCR and OCR by the 28 Districts


3. Record 21 4-room million-dollar HDB flats sold in Q1 2023

Singapore’s resale market saw a record 21 4-room HDB flats sold for more than $1 million in Q1 2023, reported TODAY.

This is triple the seven similar-type units sold over the same period last year, according to both HDB and PropNex Realty data.

Analysts said the trend of four-room resale flats selling for over $1 million started in 2018, with the sale of a 96 sq m unit at Pinnacle@Duxton for $1.028 million in June 2018.

They believe the introduction of HDB flats under the Design, Build and Sell Scheme (DBSS) in 2005, as well as the 15-month wait-out period, announced in September 2022, have contributed to the hike in prices.

More people are also willing to spend over $1 million for flats located near the city centre as private property prices have been on the uptrend.

“As resale prices climbed after Covid, more buyers turned to four-room flats in 2023 as they are more affordable,” said Lee Sze Teck, Senior Director for Research at Huttons Asia.

Analysts expect 4-room million-dollar flats to be more common. In fact, industry expert Nicholas Mak sees the trend continuing for the next 10 years due to the lack of five-room flats in popular areas within mature estates and in prime location housing areas.


4. Some expats turn to HDB flats amid rising rents for condo units

A growing number of expats are moving into HDB flats, amid rising inflation and rents for private condominium units, reported TODAY.

URA data showed that rental prices for private homes rose to their fastest pace in 15 years in 2022.

With this, property agents and analysts have noticed an uptick in rental enquiries for HDB flats among expats since last year. Some were open to renting flats that are of high quality and located closer to downtown areas as well as public transportation.

In fact, PropNex property agent Corraine Choo has closed about four to five deals a month for expats renting HDB flats, double the number she closed per month last year.

 “The salaries of expats are not increasing as much as the rent for a condo unit, it’s quite scary. It’s almost a 100% increment to rent a condo compared to two years ago,” she said.

Christine Sun, OrangeTee & Tie’ Senior Vice President of Research and Analytics, noted that the number of expats moving into HDB flats is currently low to significantly affect the HDB rental market.

However, if demand from such a group of tenants increases, it could possibly push HDB rental prices higher, she added.


5. Freehold property at 64 Wilkie Road relaunched for en bloc sale

A freehold residential site located at 64 Wilkie Road has been relaunched for collective sale, with the guide price reduced to $10 million, revealed PropNex Realty.

This works out to a land rate of $1,348 per square foot per plot ratio (PSF PPR), inclusive of the 7% balcony space as well as the Land Betterment Charge (LBC).

The property was first launched for an en bloc sale with an adjacent site at 62 Wilkie Road for $19.5 million in November last year. The tender closed with no bids received.

The site at 64 Wilkie Road currently houses five residential strata units. The building occupies a 3,306 sq ft site that is zoned for residential use under the 2019 Master Plan with a gross plot ratio of 2.1.

PropNex Realty’s Head of Investment and Collective Sales Tracy Goh expects the property “to appeal to family offices and high net worth individuals who may purchase this residential building for multi-generation families to live together and/or for investors to hold this prime residential building for legacy planning and strong recurring income”.

 The tender for 64 Wilkie Road closes on 12 May 2023.


6. Investment sales down 61% in Q1 2023

Real Estate Market Property Investment

Real estate investment deals were off to a slow start, with just $4.2 billion of investment sales registered in Q1 2023.

This marked a 61% decline from the $10.8 billion recorded in Q1 2022 and was the lowest quarterly total since Q2 2020, when the city-state was placed under the circuit breaker, revealed Knight Frank.

The residential market saw $1.6 billion in deals, comprising en bloc sales amounting to around $583.8 million.

The commercial market was quiet for the most part of the quarter, but the sale of 39 Robinson Road pushed the total sales for the sector to $1.9 billion.

The industrial market recorded a 62.8% QoQ increase in sales to $681.1 million in Q1 2023. Knight Frank attributed the hike to the market shifting focus while waiting on the potential repricing of assets within the commercial sector.

Knight Frank expects the pace of investment activity in Singapore “to get worse before it gets better”, with investment sales forecasted to range between $20 billion and $22 billion for the whole of 2023. This is down from the earlier projection of between $22 billion and $25 billion.


7. GuocoLand-Hong Leong Holdings JV lone bidder for Lentor Gardens site

The tender for a residential site at Lentor Gardens closed on 4 April 2023, with a joint venture between GuocoLand and Hong Leong Group submitting the sole bid of $486.8 million or $985 PSF PPR, according to URA.

Tricia Song, Head of Research for Southeast Asia at CBRE, noted that the price is at the lower end of market expectations. In fact, it is the lowest bid for a land plot within the Lentor precinct.

 “While this is not totally unexpected, due to the competitive dynamics of the site – it being the fifth out of seven and more successive sites to be tendered in the Lentor precinct – we believe it also reflects increasing caution among developers,” she said.

Spanning 21,866.7 sq m, the 99-year leasehold site has a maximum permissible gross floor area of 45,921 sq m and could yield 530 housing units.

With this, Song expects the developer to launch the Lentor Gardens site at $2,000 to $2,100 PSF.


8. Collective sale market muted amid widening price gap between owners, developers’ expectations

The collective sale market has been relatively muted as the price gap between owners’ and developers’ expectations has widened by up to 15%, reported The Business Times.

Knight Frank noted that the current 2021/2023 cycle has seen only a third of en bloc sales succeed, down from 63% in the 2017/2018 boom cycle.

JLL’s Executive Director of Capital Markets for Singapore Tan Hong Boon attributed the 15% price gap to rising interest rates and construction-related costs.

Chia Mein Mein, Head of Capital Markets (Land and Collective Sale) at Knight Frank, also pointed to the higher cost of replacement properties. Notably, private home prices rose by 20% to 30% over the year.

Factors such as the harmonisation of floor-area definitions – which will reduce developers’ saleable area – may also affect pricing.

With this, developers remain “very, very cautious” even as their inventories are low, while owners are not keen on reducing their prices.

However, developers may have to eventually raise their bids once the market stabilises and new sale prices continue to increase.


9. Demand for co-living space to moderate, following two years of increase

TAP-commontown-singapore-co-living (2)

Demand for co-living spaces in Singapore has increased over the past two years, with operators registering strong occupancy of at least 80%, reported The Business Times.

This comes as more Singaporeans turn to them as a more affordable option amid the surge in residential rents.

The local segment accounted for 7% of co-living tenants prior to the pandemic, before peaking at 34% in Q4 2021 and dropping to 18% in Q4 2022, according to Cushman & Wakefield’s December 2022 report.

Despite the dip in local demand, Cushman & Wakefield sees overall demand for co-living spaces to recalibrate lower but remain above pre-pandemic levels.

Meanwhile, the supply of co-living spaces has also grown, with over 677 units added to the current stock. Big players such as LHN’s Coliwoo, The Ascott’s lyf, The Assembly Place (TAP), Hmlet and Cove dominate the market, holding over 5,000 units.


10. Singapore industrial sales drop 11.6% to $799.4 million in Q1 2023

The industrial property market saw sales decline 11.6% QoQ to $799.4 million in Q1 2023, amid softer business expectations, reported Singapore Business Review citing Knight Frank.

The property expert revealed that around 97.3% of the caveats lodged in Q1 2023 were for deals of $10 million or lower.

Nonetheless, the quarter also saw large deals, which include Cycle & Carriage’s $333 million sale of four properties to M&G Real Estate and the sale of the J’Forte Building for almost $100 million to Boustead Industrial Fund.

Knight Frank noted that the leasing volume for multiple-user factories also dipped 1.5% to 1,548 tenancies during the first two months of 2023 compared to the first two months of Q4 2022.

However, median rent rose 4.7% QoQ to $2.01 per sq ft per month (PSF PM).

Business parks, on the other hand, saw leasing deals jump 66.7% to 70 tenancies in January and February 2023 compared to the first two months of Q4 2022. Median rents for business parks also increased 1.4% QoQ to $4.22 PSF PM.


Looking for a property in Singapore? Visit PropertyGuru’s Listings, Project Reviews and Guides. 

Farhan Shafie, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: farhanshafie@propertyguru.com.sg. 

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